Sri Nikhil Banik Mazumder, Howrah V. JCIT, R-46, KOLKATA, Kolkata

ITA 454/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1955 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 15-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTACHARJEE
• Keywords: Reasonable cause
• Section: 273B; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENCH KOLKATA BEFORE SHRI S.S. VISWANETHRA RAVI, JM &DR. A.L.SAINI, AM ./ ITA NO.453 & 454/KOL/2016 ( / ASSESSMENT YEAR: 2010-11) SRI NIKHIL BANIK MAZUMDER 72/2, DHARMATALA ROAD, GHUSURI, HOWRAH 711107. VS. JCIT, RANGE-46, KOLKATA. 3, GOVERNMENT PLACE(WEST), KOLKATA -1. ./ ./PAN/GIR NO. :AHSPM 1397 B (APPELLANT) .. (RESPONDENT) APPELLANTBY : SHRI SUBHAS AGARWAL, ADVOCATE RESPONDENT BY :SHRI ARINDAM BHATTACHARJEE, ADDL. CIT / DATE OF HEARING : 11/10/2017 /DATE OF PRONOUNCEMENT : 10/01/2018 / O R D E R PER DR. ARJUN LAL SAINI, AM: THESE CAPTIONED TWO APPEALS FILED BY THE ASSESSEE, PERTAINING TO ASSESSMENT YEAR 2010-11,ARE DIRECTED AGAINST THE ORDERS PASSED BY THE LD COMMISSIONER OF INCOME TAX (APPEALS)-14,KOLKATA,IN APPEAL NO.205& 206/CIT(A)- 14/WD-47(4)/2013-14, BOTHDATED 22.01.2016,WHICH IN TURN ARISE OUT OF PENALTY ORDERS PASSED BY THE ASSESSING OFFICER UNDER SECTIONS271D AND 271EOF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT), BOTH DATED 23.09.2013. 2. SINCE THESE TWO APPEALS RELATE TO THE SAME ASSESSEE, SAME ASSESSMENT YEAR, IDENTICAL ISSUES ARE INVOLVED, THEREFORE, THESE HAVE BEEN CLUBBED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. THE ASSESSEES APPEAL IN ITA NO.453/KOL/2016, FOR A.Y.2010-11, HAS TAKEN AS THE LEAD CASE. 3.THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL (IN LEAD CASE IN ITA NO.453/KOL/2016), AS FOLLOWS: SRI NIKHIL BANIKMAZUMDER ITA NO.453 & 454/KOL/2016 ASSESSMENT YEAR: 2010-11 PAGE | 2 1. FOR THAT THE LD. CIT(A) OUGHT TO HAVE HELD THAT THE ORDER OF PENALTY U/S 271D IS BAD IN LAW AND IS LIABLE TO BE QUASHED. 2. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE PENALTY U/S 271D AMOUNTING TO RS.4,00,000/-. 3.FOR THAT ON THE FACTS AND IN THE CIRUCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THAT THE TRANSACTIONS WERE BETWEEN CLOSE RELATIVES AND WERE NOT IN THE NATURE OF LOAN OR DEPOSIT, AND THUS, THE PROVISION OF SEC 271D WAS NOT APPLICABLE. 4.FOR THAT THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THAT BONA FIDE BELIEF OF THE ASSESSEE THAT TRANSACTIONS BETWEEN CLOSE RELATIVES FALLS OUTSIDE THE AMBIT OF SECTION 269SS OF THE ACT IS A REASONABLE CAUSE FALLING U/S 273B OF THE ACT. 5.THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ALL OR ANY OF THE GROUNDS OF APPEAL. 4.THE BRIEF FACTS QUA THE ISSUE ARE THAT IN THE ASSESSEE`S CASE UNDER CONSIDERATION, THE ASSESSMENT U/S 143(3) OF THE I.T ACT WAS COMPLETED BY THE AO ON 31.12.2012 AT A TOTAL INCOME OF RS.1,78,630/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE ASSESSEE HAD ACCEPTED LOAN IN CASH OF RS.4,00,000/- ON AN UNSPECIFIED DATE FROM SHRI MITHUNBANIKMAZUMDER, SON, IN CONTRAVENTION OF SECTION 269SS OF THE I.T. ACT. THE ASSESSEE REPAID LOANS IN CASH TO VARIOUS FAMILY MEMBERS IN CONTRAVENTION OF SECTION269T OF THE ACT. THEREFORE, THE AO INITIATED PENALTY PROCEEDINGS U/S 271D AND 271E OF THE INCOME TAX ACT. THE DETAILS OF REPAYMENT OF LOAN IS GIVE BELOW: S.NO. DATE OF REPAYMENT MADE AMOUNT REPAID NAME OF CREDITOR 1 UNDATED AS EVIDENT FROM LOAN CONFIRMATION 1,50,000 SHRI MITHUNBANIKMAZUMDER-SON OF THE ASSESSEE 2 UNDATED AS EVIDENT FROM LOAN CONFIRMATION 2,25,098 SHRI INDRANILBANIKMAZUMDER--SON OF THE ASSESSEE 3 UNDATED AS EVIDENT FROM LOAN CONFIRMATION 54,928 SANDHYA BANIKMAZUMDER-WIFE OF THE ASSESSEE TOTAL 4,30,026 THEREFORE, THE AO OBSERVED THAT, SINCE THE ASSESSEE HAS ACCEPTED THE LOAN IN CASH AND PAID THE LOAN IN CASH, THEREFORE, IT WAS A FIT CASE TO IMPOSE THE PENALTY UNDER SECTIONS 271D AND 271E OF THE INCOME TAX ACT, 1961. SRI NIKHIL BANIKMAZUMDER ITA NO.453 & 454/KOL/2016 ASSESSMENT YEAR: 2010-11 PAGE | 3 DURING THE PENALTY PROCEEDINGS, THE ASSESSEE REPLIED TO THE ASSESSING OFFICER THAT THESE LOAN TRANSACTIONS WERE MAINLY BETWEEN SON AND FATHER, WIFE AND HUSBAND. THE ASSESSEE SUBMITTED THAT THE TRANSACTIONS BETWEEN SON AND FATHER AND HUSBAND AND WIFE ARE FOR MAINLY GIVING SUPPORT AND HELP TO THE FAMILY MEMBERS. THE ASSESSEE ALSO SUBMITTED THAT THE INTEREST PAYMENT TO THE RELATIVES IS ALSO NOT IN THE CHARACTER OF LOAN OR DEPOSIT. THEREFORE, PENALTY UNDER SECTIONS 271D AND 271E DO NOT ATTRACT. HOWEVER, THE ASSESSING OFFICER HAD REJECTED THE CONTENTIONS OF THE ASSESSEE AND HELD THAT THESE WERE THE TRANSACTIONS BETWEEN SON AND FATHER, HUSBAND AND WIFE, THEREFORE, ASSESSEE HAD CONTRAVENED THE PROVISIONS OF SECTION 269SS AND 269T OF THE I.T. ACT. THEREFORE, THE AO IMPOSED THE PENALTY U/S 271D AT RS.4,00,000/- AND U/S 271E AT RS.4,30,026/-. 5.AGGRIEVED BY THESE PENALTY ORDERS, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A), WHO HAS CONFIRMED THE PENALTY LEVIED BY THE AO. THE LD. CIT(A) REITERATED THE STAND TAKEN BY THE AO AND CONFIRMED THE PENALTY IMPOSED BY THE AO UNDER SECTIONS 271D AND 271E OF THE ACT. 6.NOT BEING SATISFIED WITH THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED BEFORE US THAT THEASSESSEE IS A SALARIED EMPLOYEE AND IS NOT DOING ANY BUSINESS. TO SUPPORT THE FAMILY MEMBERS, THE MONEY HAS BEEN TRANSFERRED BY HIM (ASSESSEE) TO HIS SON AND WIFE ON VARIOUS OCCASIONS. THIS IS SIMPLY TRANSFER OF MONEY FROM ONE FAMILY MEMBER TO ANOTHER FAMILY MEMBER TO SUPPORT THE DAY TO DAY EXPENSES, EDUCATIONAL EXPENSES AND OTHER FAMILY EXPENSES. THE LD. COUNSEL POINTED OUT THAT SECTIONS 269SS AND 269T DID NOT APPLY TO THE TRANSACTIONS BETWEEN SON AND FATHER, BETWEEN HUSBAND AND WIFE AND BETWEEN CLOSE RELATIVES. THE SECTION 269SS STATES THAT NO PERSON SHALL, TAKE OR ACCEPT FROM ANY OTHER PERSON ANY LOANS OR DEPOSITS THEREFORE, SECTION 269SS AND 269T APPLICABLE ONLY ON COMMERCIAL TRANSACTIONS, AND BUSINESS TRANSACTIONS. THE HUSBAND, WIFE AND SON ARE NOT ANY OTHER PERSON , AS MENTIONED ABOVE IN THE SECTION 269SS OF THE ACT. THE TERM ANY OTHER PERSON APPLIES TOCOMMERCIAL TRANSACTIONS, AND BUSINESS TRANSACTIONS. IN THE ASSESSEE`S CASE UNDER CONSIDERATION THE ASSESSEE IS SALARIED EMPLOYEE AND DOES NOT DO ANY BUSINESS THEREFORE THE TRANSACTIONS BETWEEN HIM AND HIS SON/WIFE ARE NOT COMMERCIAL/BUSINESS TRANSACTIONS THEREFORE THE PROVISIONS OF SECTIONS 269SS AND 269T DO NOT APPLY.THEY ARE RELATIVES AND TRANSFER OF MONEY SRI NIKHIL BANIKMAZUMDER ITA NO.453 & 454/KOL/2016 ASSESSMENT YEAR: 2010-11 PAGE | 4 BETWEEN THEM FOR FAMILY NEED IS NOT A COMMERCIAL TRANSACTION. THEREFORE, PENALTY UNDERSECTIONS 269SS AND 269T WILL NOT BE APPLICABLE IN RESPECT OF ACCEPTING MONEY BY THE RELATIVES AND PAYMENT OF MONEY BY THE RELATIVES.THE LD. COUNSEL FOR THE ASSESSEE HAS RELIED ON THE JUDGMENT OF HON`BLE ITAT KOLKATA IN ITA NOS.331 & 332/KOL/2010 IN THE CASE OF ANANT HIMATSINGKA VS. ACIT, DATED 25.11.2011 WHEREIN IT WAS HELD THAT THE TRANSACTION BETWEEN SON-IN LAW AND FATHER IN LAW FOR GIVING A SUPPORT AND HELP AS CONTENDED BY LD. COUNSEL AND NOT DENIED BY REVENUE, IN LAW WAS NOT A LOAN OR DEPOSIT IN STRICTER SENSE OF SECTION 269SS OF THE ACT AND IT WAS ONLY A FINANCIAL SUPPORT. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER RELIED ON THE JUDGMENT OF HON`BLE ITAT KOLKATA IN ITA NO.1839/KOL/2010, IN THE CASE OF MANISHA PRAKASH AMIN VS. JCIT DATED 24.05.2011, FOR A.Y. 2006-07 WHEREIN IT HAS BEEN HELD THAT THE LOANS FROM RELATIVES ARE IN THE NATURE OF FINANCIAL SUPPORT WITHIN THE FAMILY AND THIS IS A REASONABLE CAUSE FALLING U/S.273B OF THE ACT. 7.ON THE OTHER HAND, LD DR FOR THE REVENUE HAS PRIMARILY REITERATED THE STAND TAKEN BY THE ASSESSING OFFICER, WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 8.WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS, AND PERUSED THE MATERIALS AVAILABLE ON RECORD, WE NOTE THAT ASSESSEE HAD ACCEPTED THE LOAN IN CASH OF RS.4,00,000/- FROM SHRI MITHUNBANIKMAZUMDER, (SON OF THE ASSESSEE) AND REPAID RS. 1,50,000/-. ASSESSEE REPAID LOAN TO HIS ANOTHER SON SRI INDRANILBANIKMAZUMDER AT RS. 2,25,098/- AND ALSO REPAID LOAN TO HIS WIFE SMT. SANDHYA BANIKMAZUMDER AT RS.54,928/. ALL THESE TRANSACTIONS ARE BETWEEN HUSBAND AND WIFE, AND BETWEEN FATHER AND SON, BEING CLOSE RELATIVE OF ONE FAMILY. WE ALSO NOTE THAT ASSESSEE IS A SALARIED EMPLOYEE AND NOT A BUSINESSMAN. THEREFORE, BASED ON THE FACTS NARRATED ABOVE, THESE TRANSACTIONS DO NOT FALL WITHIN THE AMBIT OF SECTIONS 269SS AND 269T OF THE ACT AND FOR THAT WE RELY OF THE JUDGMENT OF COORDINATE BENCH IN THE CASE OF ANANT HIMATSINGKA AND MANISHA PRAKASH AMIN (SUPRA).TO SUPPORT THE FAMILY MEMBERS, THE MONEY HAS BEEN GIVEN BY THE ASSESSEE TO HIS SON/WIFE. THIS IS SIMPLY A TRANSFER OF MONEY FROM ONE FAMILY MEMBER TO ANOTHER FAMILY MEMBER TO SUPPORT DAY TO DAY EXPENSES, EDUCATIONAL EXPENSES AND OTHER FAMILY EXPENSES. GOING THROUGH THE FACTS OF CASE BEFORE US, WE ARE OF THE VIEW THAT THE TRANSACTION BETWEEN SON AND FATHER AND WIFE AND HUSBAND, FOR GIVING A SUPPORT AND HELP, IN LAW,IS NOT A LOAN OR DEPOSIT IN STRICTER SENSE OF SECTION 269SS OF THE ACT AND IT IS ONLY A FINANCIAL SRI NIKHIL BANIKMAZUMDER ITA NO.453 & 454/KOL/2016 ASSESSMENT YEAR: 2010-11 PAGE | 5 SUPPORT, THEREFORE, PENALTY IMPOSED BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD CIT(A) NEEDS TO BE DELETED, AND ACCORDINGLY WE QUASH BOTH THE PENALTY ORDERS, I.E, UNDER SECTION 269SS AND 269T OF THE INCOME TAX ACT. 9.IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE (IN ITA NO.453 &454/KOL/2016), ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10/01/2018. SD/- (S.S. VISWANETHRA RAVI) SD/- (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; DATED 10/01/2018 RS,SPS / COPY OF THE ORDER FORWARDED TO : //TRUE COPY// BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/D.D.O, I.T.A.T, KOLKATA BENCHES, KOLKATA . 1. / THE APPELLANT SRI NIKHIL BANIKMAZUMDER 2. / THE RESPONDENT-JCIT, RANGE-46, KOLKATA. 3. ( ) / THE CIT(A), :KOLKATA. 4. / CIT 5. , , / DR, ITAT, KOLKATA 6. / GUARD FILE.